Last updated October 2006

Since the beginning of the Sixth Framework Programme, the IPR-Helpdesk experts have studied many draft consortium agreements (CA). They have provided users with commentaries and advice on the clauses related to intellectual property and identified common problematic points and mistakes.

“Mistakes” basically refers to cases where the CA is not in line with the EC contract, something that is not permitted (see article II.1.5 of Annex II to the EC contract1) but is not uncommon. This document compiles some mistakes and other contractual practices that, although can be problematic, do not necessarily contradict the EC contract.

CAs often include terms that are not duly defined, although they have important implications. For instance, “preferential conditions” or “fair and non-discriminatory conditions” for the granting of access rights and “exceptional circumstances” for charging transfer costs for access rights may cause misunderstandings between contractors if they are not understood by everyone to mean the same thing.

Article II.35.1.d states that the exclusion of pre-existing know-how from the obligation to grant access rights shall be made by written agreement wherein each contractor specifically identifies the pre-existing know-how that it wishes to exclude. The following practices are not in line with the rules2:

• CA details a list of the pre-existing know-how that contractors wish to include and excludes all the rest. This practice (also known as a “positive list”) is the reverse of the one indicated by the article (also known as a “negative list”, where contractors identify the pre-existing know-how to be excluded). Therefore, it is not a specific exclusion, nor does it inform the contractors of what is excluded.
  
  
• CA details pre-existing know-how within the limits of contractors’ specific departments or research teams that actively participate in the project. As pre-existing know-how belongs to contractors, not to their specific departments (article II.1.18), this practice is not valid.
  
  Contractors may avoid these practices (which can lead to adverse results since no pre-existing know-how is duly excluded and thus all pre-existing know-how is in principle subject to access rights) and restrict the scope of access rights to pre-existing know-how through a precise and stringent definition of what is needed. It is important to remember that access rights shall be granted only when the requesting contractor needs them in order to carry out work under the project or to use its knowledge (article II.35.2.a and 3.a). So, the idea would be to limit access rights to what is strictly necessary for the implementation of the project or the use of the knowledge (but not beyond this limit, since excessively restricting access rights would hinder the implementation of the project while being contrary to the EC contract).
  
  
• Finally, contractors may exclude pre-existing know-how either before signing the EC contract or before a new contractor joins the consortium. CAs often stipulate that when a new contractor enters, the original contractors can exclude pre-existing know-how. In principle, all exclusions should be made to all contractors, unless specific legitimate interests (such as competition concerns) justify a limited exclusion of one or more contractors only. Besides, the new contractor also has the right to exclude, something that CAs often fail to recognise.
  
  The entrance of a new contractor may require a re-negotiation on the exclusion, so original contractors may also exclude pre-existing know-how that was developed in parallel to the project (commonly known as “sideground”). Sideground does not exist before the signature of the EC contract and therefore it can only be excluded when, and if, a new contractor joins the consortium. Some CAs provide for an automatic exclusion of all sideground, a practice that is also against to the rules.
  
  

CAs often stipulate that when a contractor decides not to protect its knowledge, it shall inform the other contractors, who might be interested in protecting it. However, the Commission shall also be informed (article II.33.2), preferably before or at the same time as contractors, and at least before any final decisions are taken.

The publication of data related to knowledge is governed by article II.33.3, which also establishes the deadlines for notification and objection. CAs should not restrict these deadlines in order to speed up procedures.

Similarly, it is important to remember that theses and other academic works are also publications, which should be approved accordingly. The protection of knowledge shall always prevail over publication, something that should be clearly expressed in the clauses related to academic works.

Contractors often misinterpret the meaning of article II.35.3.b and state that the duration of access rights for use purposes shall be two years after the end of the project. In fact, this is the time period during which contractors may request access rights. The duration of access rights can be established at will.

Affiliates are third parties to the project. If contractors decide to provide access rights for them in the CA, there are three issues to consider:

1. it is highly advisable to complete the definition of affiliates CAs generally contain with an annex where contractors identify all associated companies to be granted access rights. The list may be updated during the project. Consortia often omit the annex and have problems because it is not clear which affiliates in particular are included in the definition and are eligible for licences.
   
   
2. since affiliates are third parties, contractors have the obligation to inform the Commission if access rights to be granted could be contrary to the interests of European economy or to ethical principles (article II.35.1.a and b)3. Consortia sometimes neglect this with regard to affiliates, thus failing to fulfil their obligation of notification.
   
   
3. contractors shall ensure that any agreement signed with the affiliates (as with any third party) will not affect the other contractors’ access rights (either already granted or to be potentially granted for project execution or use purposes)4.
   
   

The word “use” has a very specific meaning within the FPs (it refers to the economic exploitation of the results and to their utilisation in further research activities; article II.1.30). Practice shows that many consortia confuse the terminology, by employing “use” in italics to refer to the common sense of this word (utilise), what make provisions hard to understand.5